Distributors Must Become Brand Value Creators – Distributors in the Digital Era #50

There is a growing realization in today’s hypercompetitive and disrupted markets that the only brand value that counts is the one that is created through intentional interactions between humans, either online or in person. Brands are created through experiences, and experiences are created by two or more humans doing something together. Experiences are unique and flexible, since feedback is received on what is said and what is done. Advertising is unidirectional and fixed. Chatbots built on artificial intelligence may deliver experience-based brand value, but they do so by mimicking the results achieved by humans.

All of this is critically important for distributors, because, as historically local, people-based businesses, distributors are on the front line of creating customer experiences. From this position, distributors can build their own brand and offer highly valued services for suppliers that the supplier can’t achieve on its own. In the past, suppliers leveraged distribution channels because of the physical presence they provided for delivering products to end-customers. In the very near future, suppliers will value distributors for their presence, measured by their skill at creating intentional, person-to-person customer experience.

Suppliers can do some of this on their own, but often they lack meaningful end-customer interactions. Even if suppliers have end-customer interactions, distributors are the force multiplier, amplifying what the supplier can achieve on its own. But, there is a catch. Distributors must prove their ability to create brand value through customer experiences. Luckily, the proof is in the pudding. If a distributor can build its own brand, then it can do so for its suppliers as well. The strength of a distributor’s brand will directly influence the pricing and programs offered by its suppliers. Build your brand and build your profits.

Building brands through intentional customer experiences is not a strength of distributors, however. Traditionally, distributors are back-end businesses, focused on operational excellence around inventory management and logistics services. But, that is changing. The threat of disruption and the opportunity for using digital tools (e.g., e-commerce, advance analytics, social media, etc.) is refocusing distributors to become front-end businesses. The capabilities that count are the ones that solve problems and create opportunities for customers. Distributors do not add value to supplier products. Rather, they create value for customers. Actions build brands. Brands build profits.

Many distributors are learning as they go, and several aspects of building brands through customer experience have emerged:

Intentional customer experiences require planning. Planning starts with a deep understanding of the customer’s business operations, markets and success measures as a foundation for identifying and delivering customer experiences.

Storytelling is a core competence. Through actions and words, both in person and online, building a brand is about telling a story, starting with how the distributor’s products or services help the customer succeed on the customer’s terms.

Storytelling can be online, in person, or in a brick-and-mortar location. For the greatest effect, distributors must be competent at all three. Online can be through social media or in a webstore. In person can be through inside sales, customer service, field sales or field technicians. The future of brick-and-mortar locations is about creating new and valued customer experiences in spaces made irrelevant by disruptive forces.

Customer experiences are interactive. Scripts and role-playing are helpful, but new competencies are required for a distributor’s employees in customer-experience roles. They must think on their feet. They must translate strategy into messaging. They must listen with their ears, eyes and hearts to what the customer is saying and adjust to that experience.

Intentional customer experiences translate to increased margins. Advanced analytic tools may help a distributor figure out where its greatest opportunities are for intentional customer experiences, but proactive storytelling and powerful customer experiences create results. Otherwise, the primary value offered by analytic tools is about cutting costs and (if lucky) sneaking a few differentiated (and higher) prices by customers.

Intentional customer experiences are essential for competing with Amazon. Amazon is an incredibly powerful and capable competitor. One whose attention is turning to distributor markets. To survive, distributors must plan and execute intentional and differentiated customer experiences. With excellence, distributors that can create the best brand value through customer experiences will not only survive, they will prosper.

Is your business skilled at creating brand value through customer experiences? Is this topic new to you? Do you have feedback or better ideas than those expressed in this blog post? If so, I would like to hear from you. Feel free to reach out to me at mark.dancer@network4channelinnovation.com.

Mark Dancer, NAW Institute for Distribution Excellence Fellow

Mark Dancer founded the Network for Channel Innovation to drive awareness, advocacy and excellence for channel innovation, and to enable an exchange of ideas between channel leaders on business transformation, technology adoption, social impact and community engagement. For more than 30 years, Mark has worked with leading companies to achieve channel excellence across a wide range of industries in developed and emerging markets.